Health Insurance Types

Indemnity plans are a traditional form of insurance that allows policyholders more choice in and control over their health care. An indemnity plan lets you choose your doctors, hospitals, and other health care providers. You may see a specialist without a referral from your general practitioner, and your insurance company doesn't have the power to decide if the visit was necessary. Though you have the freedom to select your provider, your benefits are maximized when you choose providers who participate in the network of your insurance company. When you compare health insurance rates, expect indemnity plans to have higher premiums and out-of-pocket costs. Usually, you will pay all of your medical expenses until you hit the out-of-pocket cost ceiling, upon which the company pays all of your expenses.

PPOs arrange for lower fees with a certain network of providers. If you stay within this network, you will enjoy considerable cost breaks. As you compare health insurance rates, keep in mind that if you choose to visit out-of-network providers with a PPO, you will likely end up paying the entire bill and then have to submit it to the insurance company for partial reimbursement (usually 80%). A PPO might also not cover preventive care. With a PPO, you do have the ability to refer yourself to a specialist, and as long as the specialist is in-network, you will have the same co-pay. You will see when you compare health insurance rates that PPOs are less expensive than indemnity plans but more expensive than HMOs.

Health Maintenance Organizations (HMOs)

Health maintenance organizations are the least expensive type of insurance, but they also offer less flexibility in your healthcare. HMOs are usually intended for people in group plans rather than individuals. HMOs offer low or no co-payments and, in return, you agree to see only the HMO's doctors. Before you see a specialist, you must receive a referral from your primary care physician. You will also probably need to get prior authorization before you visit an emergency room. An HMO may have central medical clinics or could be comprised of a group of individual practices. If you visit a physician outside of the HMO, you will pay the entire cost out-of-pocket. If preventive care is important to you as you compare health insurance rates, keep in mind that HMOs have the best reputation for covering preventive care.

Choosing the best plan is up to you, but you should have some health insurance knowledge befeore you choose.